Nigeria proposes regional bond market reforms to spur cross-border investments
Nigeria is proposing a series of regional capital market reforms to make it easier for investors to trade bonds across West Africa and unlock long-term funding for infrastructure and growth, Finance Minister Taiwo Oyedele said on Tuesday.
Oyedele told an S&P Global Ratings Africa Summit in Lagos that fragmented capital markets across West Africa are limiting access to long-term financing, with no single market deep enough to attract the scale of investment needed for infrastructure and economic growth
He proposed a regional “passport” regime that would allow issuers approved in one participating market to raise capital across others without seeking separate regulatory approvals
Nigeria is also advocating a unified investor identification system, enabling investors registered in one market to buy bonds and equities across the region without repeating onboarding requirements
Oyedele called for linking regional trading, settlement and payment infrastructure so securities transactions can be settled directly in local currencies, reducing reliance on the US dollar
The plan would encompass 10 countries: Nigeria and Ghana and eight francophone countries that share the CFA franc and a common central bank. They are Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo
Oyedele said existing initiatives, including the West African Capital Markets Integration Council, the African Exchanges Linkage Project and the Pan-African Payment and Settlement System (PAPSS), provide a foundation for greater market integration
“The task now is to join these pieces together,” Oyedele said
Additional proposals include creating a regional local-currency bond index and a credit enhancement facility to support cross-border infrastructure financing
Nigeria aims to attain investment-grade credit ratings within three years and is targeting a capital market worth at least $1 trillion under a 10-year capital market plan, while making the country a more attractive destination for domestic and foreign investors, Oyedele said
